Exhibit 10.21
2007 CONSULTING AGREEMENT
THIS
2007 CONSULTING AGREEMENT (this “Agreement”) is
entered into on this 5th day of March 2007, with an effective
date of November 15, 2006 (the “Effective
Date”) by and between Penn Octane Corporation, a Delaware
corporation (“Penn Octane”) and Rio Vista Energy
Partners L.P., a Delaware limited partnership (“Rio
Vista”) (Penn Octane and Rio Vista collectively,
the “Company”) and JBR Capital Resources, Inc., a
Nevada Corporation (“Consultant”), as
follows:
Agreement
In
consideration of the covenants and agreements contained herein, the
parties agree as follows:
Section 1: Engagement of
Services
1.1 Services Performed by
Consultant . Consultant shall serve as a special advisor to
Penn Octane and Rio Vista and shall provide the following services
(the “Services”) to the Company: assistance with
the Company’s acquisition and disposition of assets,
assistance with other transactions involving the Company, and such
other services as may be mutually agreed between the Company and
Consultant. Consultant’s duties may be reasonably modified at
the Company’s discretion from time to time. Consultant will
report directly to the chief executive officer and the chairman of
the board of directors of Penn Octane and the chief executive
officer and the chairman of the board of managers of the general
partner of Rio Vista.
Consultant shall at all times faithfully and
diligently perform the Services under this Agreement and use
Consultant’s best efforts, skill, and attention for the
fulfillment of the Services and the interests of the Company.
Consultant shall have discretion and control of the rendering of
the Services and the manner in which said Services are performed.
Consultant shall perform all such Services under the name and as a
representative of the Company to any third parties engaged in
discussions with the Company. Unless otherwise agreed to by the
parties, Consultant shall have no obligation to work any particular
hours or days, nor shall Consultant be obligated to devote full
time to the performance of the Services.
1.2 Company
Affiliates .
Consultant acknowledges and agrees that the Company may, from time
to time, request Consultant to provide the Services or such other
related services to any of the Company’s Affiliates, subject
to the terms and conditions of this Agreement. For purposes of this
Agreement, “Affiliates” shall mean a parent company, or
an affiliated or subsidiary corporation or any other legal entity
that is owned, whether entirely or partially, or controlled by the
Company. As used in this definition, “owned or controlled
by” means owns or holds the right to vote any of the stock or
units of such entity, including without limitation, the
Company’s affiliated limited partnerships and limited
liability companies in the United States and the Company’s
affiliated entities in Mexico. To the extent that the Consultant
provides any services to the Affiliates, such Affiliates would have
all the rights and benefits provided to the Company hereunder, as
if such Affiliates were the Company.
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1.3 Independent
Contractor . Consultant enters into this Agreement as, and
shall continue to be, an independent contractor. Under no
circumstances shall Consultant look to the Company as his employer,
or as a partner, agent or principal. There shall be no tax
withholdings taken from any Fees paid to Consultant pursuant to
this Agreement (including, without limitation, FICA, state and
federal unemployment compensation contributions, and state and
federal income taxes), and Consultant shall pay, when and as due,
any and all taxes incurred as a result of Consultant’s
compensation pursuant to this Agreement. Upon request, Consultant
shall provide the Company with proof of such payment.
Consultant will indemnify and hold harmless the
Company from and against all claims, damages, losses and expenses,
including reasonable fees and expenses of attorneys and other
professionals, relating to Consultant’s failure to pay such
taxes as well as any obligation imposed by law on the Company to
pay any withholding taxes, social security, unemployment or
disability insurance, or similar items in connection with
compensation received by Consultant pursuant to this
Agreement.
Consultant also understands and agrees that
Consultant shall be solely responsible for complying with all
federal, state, and local laws requiring business permits,
certificates, and licenses required to carry out the Services to be
performed by Consultant under this Agreement. Furthermore,
Consultant recognizes that it is Consultant’s responsibility
to obtain all insurance coverage (including workers’
compensation) for Consultant. Upon request, Consultant shall
provide the Company with proof of such coverage.
1.4 Agency .
It is expressly understood and
agreed that Consultant shall only represent the Company to the
extent expressly authorized by this Agreement, and in no other way,
and that Consultant shall not be an agent of the Company. In this
regard, Consultant shall have no authority to enter into any
agreements or other binding obligations on the Company’s
behalf without the prior specific written authorization of the
Company, and that Consultant shall not hold himself out as an
officer, employee or agent of the Company; provided, however, that
Consultant may hold himself out as a representative of the Company
as specifically authorized by this Agreement or otherwise by the
Company.
Section 2: Compensation
2.1 Payment of Fees
. In consideration of the
Services rendered by Consultant to the Company and/or to the
Affiliates, the Company agrees to pay the following fees
(“Fees”) to Consultant:
(a) an amount equal to $2,000.00 per day
of Services, each such day of Services to be authorized in advance
by the Company. No Fees shall be due or payable for days of
Services unless authorized or approved by the Company. Consultant
shall (i) submit each invoice for Services to the Company for
review and approval, (ii) furnish a reasonably detailed
description of Services for each day covered by an invoice,
(iii) furnish separate invoices for Services performed on
behalf of Penn Octane and on behalf of Rio Vista, and
(iv) deliver all invoices to the Company within thirty (30)
days following the month in which the Services were performed.
Subject to the foregoing, Fees under this
Section 2.1(a) will be due and payable to Consultant
thirty (30) days following the receipt by the Company of
Consultant’s approved invoice for Services; and
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(b) an amount equal to two percent (2%) of
the net proceeds to the Company resulting from a sale of assets to
a third party introduced to the Company by Consultant. Net proceeds
shall equal the total purchase price for the assets, subject to any
adjustments contained the purchase and sale agreement, net of
transaction costs. Purchase price adjustments shall not include
payment of intercompany debt, and transaction costs shall not
include taxes or other costs not directly related to the sale. Fees
under this Section 2.1(b) will be due and payable to
Consultant thirty (30) days following the receipt by the
Company of such net proceeds. Consultant shall be entitled to Fees
with respect to any such sale of assets that occurs after the
Effective Date and on or before ninety (90) days following any
termination or expiration of this Agreement. Consultant shall not
be entitled to any Fees with respect to any sale of assets that
(i) occurs more than ninety (90) days following any
termination or expiration of this Agreement or more than one year
following the Effective Date, whichever first occurs, or
(ii) is made at any time to a third party not introduced to
the Company by Consultant. For purposes of this paragraph,
TransMontaigne Product Services Inc. and its affiliates shall be
deemed to be a third party introduced to the Company by
Consultant.
Penn
Octane will be responsible for payment of Fees only with respect to
Services relating to Penn Octane. Rio Vista will be responsible for
payment of Fees only with respect to Services relating to Rio
Vista. With respect to Services relating to both Penn Octane and
Rio Vista, the Fees will be shared equally by Penn Octane and Rio
Vista unless otherwise determined by the Company. Rio Vista will
reimburse Penn Octane for any Fees that Penn Octane pays to
Consultant on Rio Vista’s behalf.
In the
event of any disagreement between the Company and Consultant with
regard to the calculation of Fees, the amount of Fees shall be
conclusively determined by the Company’s independent public
accountants within thirty (30) days following written request
by either the Company or Consultant, and the Fees will be due and
payable ten (10) days following such determination.
Nothing contained in this Agreement shall
preclude the Company from paying additional fees or compensation to
Consultant in connection with the completion of any transaction
relating to the Services. Any understanding regarding such
additional fees or compensation will be memorialized in a separate
written agreement between the parties. No additional fees shall be
due or owing by Company to Consultant in the absence of such a
separate agreement.
2.2 Expenses
. Consultant shall
provide receipts for all actual, reasonable travel and other
out-of-pocket expenses incurred by Consultant as necessary in
connection with the performance of the Services by Consultant.
Consultant agrees to submit to the Company such documentation as
may be necessary to substantiate all such expenses and
reimbursements for deduction by the Company as reasonable and
necessary under Section 162 of the Internal Revenue Code. No
expense claim submitted by Consultant more than ninety
(90) days after incurred shall be reimbursed.
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2.3 Taxes.
Fees do not include taxes. To the
extent that Consultant is required to pay any federal, state or
local income, sales, use, property or value-added taxes based upon
the Fees and/or the Services provided under this Agreement, such
taxes shall be the sole responsibility of Consultant.
Section 3: Term; Termination
3.1 Term
. The initial term of this Agreement
shall be six (6) months beginning on the Effective Date unless
terminated sooner in accordance with the provisions of this
Section 3.1 . This Agreement shall automatically renew
for an additional six (6) months at the end of each 6-month
term unless terminated upon written notice to the other party at
least thirty (30) days before the end of such term. Each of
the Company and Consultant may terminate this Agreement, with or
without cause, at any time upon thirty (30) days’
written notice to the other party. Notwithstanding the foregoing,
the Company may revoke the authority of Consultant to act as a
representative of the Company at any time upon written notice to
Consultant. The provisions of this Agreement specified in
Section 10.12 shall survive the expiration or
termination of this Agreement.
3.2 Final
Payments . Following
termination of this Agreement in accordance with
Section 3.1 , any accrued, but unpaid, Fees shall be
shall be paid to Consultant in accordance with
Section 2.1 . Within thirty (30) days following
the date of such termination, Consultant shall submit a final
expense reimbursement request to the Company in accordance with
Section 2.2 .
Section 4: Confidentiality.
4.1 Duty to Maintain
Confidential Information.
(a) The Company and the Affiliates have
previously furnished to Consultant, and may continue to furnish to
Consultant, such information, proprietary data and access to the
Company’s personnel and records (all such information and
access, “Information”) as reasonably necessary and/or
appropriate for Consultant to perform the Services, the
confidentiality of which gives the Company and the Affiliates a
competitive advantage in its business. As used herein, the term
“Information” is to be broadly construed and includes,
but is not limited to, (i) presentations, ideas, trade
secrets, processes, systems, techniques, formulas, source and
object code, data, programs, know-how, flowcharts, methods,
compounds, diagrams, drawings, models, specifications,
improvements, discoveries, developments, designs, and other works
of authorship, whether patented or registered for trademark or
copyright protections, if any, (ii) information regarding
marketing, sales, licensing, accounting, product or service
development, assets, competitive analyses, unpublished financial
statements, budgets, forecasts, prices, costs, business plans,
research and development plans, clients, client marketing, research
and any other confidential client activity, suppliers, and
employees, (iii) information relating to potential
acquisitions, dispositions and financing of the Company and
Affiliates, and (iv) any other information of the type which
the Company and/or the Affiliates have a legal obligation to keep
confidential or which the Company and/or Affiliate treats as
confidential or proprietary, whether or not owned or developed by
the Company or the Affiliates. The term “Information”
shall also include any and all such Information pertaining to the
Company, its Affiliates, and their respective customers and
suppliers.
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(b) During the time that this Agreement
remains in effect and at all times thereafter, Consultant
agrees:
(1) to keep the Information confidential
and not to copy, publish, transmit, or disclose to others or allow
any other party to copy, publish, transmit, or disclose to others,
any Information, except in accordance with Consultant’s
fiduciary duty to the Company pursuant to this Agreement and in
furtherance of the interests of the Company and the
Affiliates;
(2) to use the Information exclusively for
the purpose of performing the Services under this Agreement and for
no other purpose; and
(3) that the Information is, shall be, and
shall remain the exclusive property of the Company and the
Affiliates, and Consultant shall neither have nor acquire any
right, title, or interest therein.
(c) The foregoing confidentiality
obligations of Consultant shall not apply to any information that
is (i) a matter of public knowledge (from a source or sources
other than Consultant), (i
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